Time Warner will be fine even if the AT&T acquisition doesn’t go through

Time Warner will be fine even if the government blocks the bid from AT&T to buy the company.

That’s the word from John Martin, the free-wheeling chief executive of Time Warner subsidiary Turner Inc., who was speaking at the Code Media conference in Huntington Beach.

For the record, Martin says that the government’s position on the acquisition offer is “stupid” and that it will likely lose its case. “It is a massive misallocation of resources and capital to fight this thing,” Martin said. “They are going to lose.”

Martin argued that while the value of AT&T had remained flat after news of the acquisition broke, Amazon and Google added roughly the equivalent of the telecommunications company’s market cap over the same period. Meanwhile, Facebook’s valuation grew to the size of two Time Warners, Martin said.

“So if you’re the government and you’re worried about fixing the competitive landscape, what are you worried about?”

His point was that the competitive landscape would not be harmed by a merger of the two companies.

“In the history of the country, what vertical merger has tilted the landscape of the competitive environment? Let me give you the answer: Zero.”

Still, should for some reason the government make its case, Time Warner could survive… for a time. The company is coming off its best year across most of its media properties, according to Martin.

“Time Warner is a pretty stable, big successful company. So I mean, HBO is on fire right now. Warner Brothers had the most successful year in its history in 2017. We did too. Whatever happens happens,” said Martin. “The future is really bright.”

That said, consolidation is the name of the game, and should Time Warner not be bought by AT&T it would need to find another acquirer eventually.

Martin and his fellow panelist, A+E Networks chairman and chief executive Nancy Dubuc, noted that in this new media landscape size does matter. They both expected that Viacom would have to reintegrate with CBS — and that observation matters for Martin’s own assessment of Time Warner’s stability.